House Price Update to 9 Junr 2010

UK House Prices Situation: Little significant change in most areas

UK House Prices Forecast: No overall growth in most areas in 2010

House Prices Rising Says Nationwide…

Average house prices rose by 0.5% in May, bringing the average annual rate of change to 9.8%, according to new figures from Nationwide.

Nationwide said that house prices are now just 9.5% below their 2007 peak – good news for many homeowners worried about negative equity. However, the good news was tempered by the fact that "housing market conditions remain characterised by thin transaction volumes" – highlighting what many buyers already know, which is that poor mortgage availability and demanding lending requirements are preventing many would-be buyers from being able to secure a new mortgage deal.

...But Halifax Says Prices Are Falling

Despite the apparent good news from Nationwide, the latest Halifax House Price Index – published just one day after Nationwide's index – show that average house prices fell by 0.4% in May, leaving the annual rate of change at 6.9%.

Halifax's figures show that house prices have risen 8.3% above the low point reached in April 2009 and are now 16% below the August 2007 peak.

How can two similar indices publish such different results? It's a good question. Part of the answer is that both organisations rely on their customers for their data – so each has a different set of data. The other part of the answer is that both organisations have slightly different techniques for 'seasonally-adjusting' their figures – giving contrasting results.

Another reason for the differences, at the moment, might be the relatively low transaction volumes – with fewer houses being bought and sold, variations in individual prices will have a more exaggerated effect on the statistics than they would in a busier market, when they would average out more consistently.

Read about UK House Price indexes / key statistics that track the ups and downs of house prices

Read our take on the Credit Crisis the effect on UK House Prices and Mortgages. A Special Report

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